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snow_lady [41]
3 years ago
6

A firm has issued $5 par value preferred stock that pays a $0.80 annual dividend. The stock currently sells for $9.50. In calcul

ating WACC, what should one use for the value of the firm's preferred stock
Business
1 answer:
Aloiza [94]3 years ago
7 0

Answer:

$9.50

Explanation:

In the given case, the value of the firm preferred stock is equal to the market value price or selling price of the preferred stock

In mathematically,

Value of the firm preferred stock = market price or selling price of the preferred stock

Value of the firm preferred stock = $9.50

It only consider the market price of the preferred stock

All other information which is given is not relevant. Hence, ignored it

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3 years ago
Assuming the required-reserve ratio is 20%, after a $5 billion purchase of securities (government bonds) from the non-bank publi
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